The Shareholders of Innovative Technologies Ltd (ITL)have Invested a Total

question 46

Multiple Choice

The shareholders of Innovative Technologies Ltd (ITL) have invested a total of $3 million and require a return of 15 per cent.The debtholders of ITL have invested $20 million and charge an interest rate of 9 per cent.Which of the following is the total return required by the company's capital providers?

• A)$225,000
• B)$1,000,000
• C)$12,250,000
• D)$2,250,000

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Definitions:

Marginal Cost

The incremental expense incurred when a business produces another item of its product line.

Marginal Cost

The elevation in total spending caused by the assembly of one additional unit of a product or service.

Average Cost

It refers to the total cost divided by the number of goods or services produced.

Monopolist

A sole provider of a good or service in a market, facing no direct competition, which often results in the power to set prices.